Although targeted gene replacement is possible in some organisms, including mouse cells, the low efficiency of this process limits some applications. In addition, no effective gene targeting protocol exists for many experimental organisms. Making a double-strand break in chromosomal DNA stimulates gene targeting. The purpose of this proposal is to test the capabilities of nucleases with zinc finger DNA-binding domains (ZFNs) as targetable DNA cleavage reagents. Zinc fingers that recognize new sequences can be generated by changing the identity of a few amino acids that contact the DNA directly, so they are capable in principle of being directed to arbitrarily selected targets. The approach of stimulating gene targeting by cleaving the target should be applicable to many different organisms and situations, including the generation of animal models of human disease and ultimately to human gene therapy. The application of ZFNs to gene targeting in mammalian cells will be pursued initially at the mouse HPRT gene, which has advantages for genetic analysis. Zinc fingers that recognize a target in exon 3 have been isolated and engineered into the nuclease construct. Various methods for delivering these ZFNs and a marked donor DNA to cultured ES cells will be tested, and the efficiency of targeted recombination measured. The influence of the extent of homology between donor and target DNAs will be assessed, as will the location of the alteration in the donor with respect to the cleavage site. To determine what pathway of recombination is responsible for targeting with ZFN cleavage, the effects of mutations that affect DNA repair by homologous recombination will be tested. In an attempt to reduce integration of the donor at nonhomologous sites, mutations in genes involved in nonhomologous repair will be investigated. To demonstrate the generality of this approach to gene targeting, it will be applied to another mouse locus, the Rpo2-1 gene.